Gold, crop prices go up
Gold prices closed higher Tuesday even as some investors put their money back into the stock market, an unusual situation that reflected continued anxiety among investors.
Gold prices usually fall when the stock market rises, as it did for much of Tuesday. But gold prices continued to climb. The S&P 500 finished the day up more than 5 percent.
Investors aren’t willing to let go of their gold reserves, which are seen as a secure investment in times of economic turbulence.
“When you have a big up-move in the stock market, gold gets sold. It didn’t do that. It tells me that we’re in for some prolonged stability in the gold market,” said George Gero, vice president at RBC Global Futures in New York.
Investors are clinging to their gold contracts as a kind of back-pocket insurance policy, Gero said. Even when portfolio managers are buying stock, they now appear unwilling to let go of their contracts for a hard asset like gold.
Gold for December delivery gained $29.80 to close at $1,743 an ounce. September Silver, by contrast, fell $1.497 to finish at $37.883 an ounce.
Other commodities followed more predictable patterns. Crop prices rose as rising stock prices hinted at higher demand for food. Industrial metals were also up.
September palladium gained $6.05 at $734.55, and October platinum gained $32.80 to end at $1,756.40. Copper for September delivery gained 0.85 cent at $3.97 per pound.
Wheat for September delivery rose 15.25 cents to finish at $6.7175 per bushel. December corn gained 2.5 cents at $6.885 per bushel and November soybeans fell 11.75 cents to $12.9975 per bushel.
In energy trading, oil prices continued to fall on worries that a tepid global economy could crimp future demand for oil and gas. Those worries intensified after the Federal Reserve said Tuesday afternoon the U.S. economy is recovering at a slower pace than it expected.
The Fed said it will keep its key interest rate “exceptionally low” through mid-2013. The central bank expects the economy to stay weak till then, and that implies oil and gas demand in the U.S. will be less than robust as well.
Benchmark crude for September delivery dropped $2.01 to finish at $79.30 per barrel on the New York Mercantile Exchange.
Heating oil lost 3.69 cents at $2.7648 per gallon. Gasoline futures fell 2.4 cents to $2.6676 per gallon and natural gas rose 5.9 cents to end at $3.994 per 1,000 cubic feet.
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